go to stamps.com/tv and never go to the post office again. >> i'm jim cramer and welcome to my world. >> you need to get in the game.

>> firms are go going to go out of business, and he's nuts! they're nuts! they know nothing! >> i always like to say there's a bull market somewhere. "mad money," you can't afford to miss it. >> hey, i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends. i'm just trying to make you some money. my job is not just to entertain, but to teach and to coach you. so call me at 1-800-743-cnbc. may 2013 be as good as 2012 for you in the stock market. that's what i found myself thinking all day, in spite of today's incredible action, best day in over a year. the dow soaring 308 points. the nasdaq rocketing 3.07%. i feel like i'm surrounded by people who are already fretting about the next big bad thing. this time it's the debt ceiling fight.

they're worried even as it seems the market has a tremendous case of seller's remorse. they're scared. even as it seems those who fled the market year end are in there buying back the same stocks we sold when we looked certain to plunge into the fiscal abyss. how else do you explain how we got the best first day of the year for the s&p since 2009? let's just take a moment to smell the 2012 roses. no one else did, because they seemed to smell pretty good to me, and it's easy to go right past them without an ounce of thought. not tonight, not for me. i'm not advocating wearing these. i'm not wearing rose-colored glasses. i'm saying there are some genuine roses out there totally invisible to the naked eye, that i heard very few people celebrate today. that ends here. look, let's talk "mad money" manifesto for a moment. my job, what is it? it's pretty simple, right? it's to try to help you make money.

i may not always be right, i'm first to admit it, okay? but i know there's an opportunistic, optimistic way to make money while embracing skepticism and cold-hearted reality and there's an unrealistic way to not make money, which is to be continually cynical, offering a corrosive mindset dedicated to the proposition that there are no rose gardens to begin with, just thorns. thorns that are endlessly in your way. so why even venture into the thicket? maybe it's because of my spare time i like to garden more than any other hobby. but a rose of an s&p that's up 16% like it was in 2012, a rose that keeps capital gains and dividends taxes lower than i would have expected even two weeks ago, a rose that allows the middle class to stay ensconced in permanently lower tax rates, these roses must be celebrated even if it is for some small hour on some cable show. i start this year somewhat dazzled by events. a week ago i was worried that

tax rates would go up for everyone. you could barely be compensated for owning higher-yield stocks and we'd have to put a meat axe to government spending, going over the cliff worried me, gave me pause about 2013, as i trust it did for you, too. even yesterday when i heard that eric cantor, the house majority leader, was going to try to scuttle a hard-fought deal that was overwhelmingly approved in the senate, it gave me again pause about what could happen this morning. i was prepared for a down 300, 400. but cantor, who momentarily was a sure candidate for the wall of shame if he kept up that stuff, he ultimately backed down and we got a deal that everyone dislikes, which is the essence of what it means to rise above politics. you're supposed to dislike it, for heaven's sakes, it's a compromise. right now about the pending vitriolic battle over the debt ceiling other than the fact that the buyers weren't too scared of the upcoming big bad debt fight today.

what makes me not so concerned first? i know there are plenty of other people who will worry about the debt ceiling. i don't have to do it. let them worry about it. i worry about the things very few people are worried about. i acknowledge i'm a talking head, fretting over, problems that are thought about in advance by everybody, they have a tendency to be resolved. remember the european nightmare, listen, kick the can, 29% in germany, 20% increase in france. let's play that game. second, i was far more concerned about where individual tax rates would end up than i am about the coming battle over spending. i want to see social security paydays backed up and i want to see people pay more for medicare. i want to see some creative ways to make money. it's regressive, but maybe we need a national sales tax. i don't know. but all of these right now are secondary to the big cliff we just avoided. i suspect that president might invoke the 14th amendment to

ignore the debt ceiling and argue that the debts must be paid. even though i want to see spending reined in very badly, that's important to me. what's happened each time we've been blindsided by washington? we miss what's going on around the globe, a first-class recovery and remarkable at that. something my charitable trust which beat the 2012 estimates, has been vesting in. how to invest that way later in the show. you know we miss the wave of mergers and acquisitions that i now think can happen, since we avoided a cliff dive. don't you wish you owned the rental car companies today, pricing just got better now that avis bought zip car for $500 million. we missed the bank stock rally. citigroup, bank of america charging ever higher, even as they're so far behind the market, they could go up hugely from here without stretching their valuations. we missed the continued

improvement in housing and housing related stocks, something that won't be derailed by a debt ceiling debate. and we'll stay stoked by low interest rates and affordability. helped by gigantic rebuilding in the northeast. we missed the deep recovery rally in tech. numbers may be too low and at last, the promise of facebook could be realized thanks to the newfound embrace of mobile opportunities, better than anyone else can. when we're blinded by washington we fail to capitalize on what might just be an increase in small businesses now that the cliff cloud has cleared. i keep thinking about the words of marty mucci, ceo of paychex. we just got some certainty and people start new companies again at a pace that used to be rather natural. but we have the level of certainty, i think mucci will be right. i think that there was a small minority that held our nation

hostage in the end, only 167 members in the house rebelled against the compromise. 257 were in favor. couldn't the same thing happen again with the debt ceiling? would that be so strange? now hey, while you're waiting, do you sell those dividend stocks again, dump the master limited stocks? how did that work for you? is that the take-away from the rose garden that sprung from the thorns of the debate? throughout my 33 years, yes, 33 years in the stock market. i've always taken heed of the skeptics but i have blocked out the cynics most effectively. because the dow jones industrial average was 12,000 points lower than it was when i got started. it seems like the right call. when i think we're going it take a gigantic hit, i'm willing to shout it from the roof tops, like i did in 2008. i want to bring them back in at much lower levels when the fire was put out, i'm proud of that. but there's no fire in sight

now. just a smokescreen from washington. that will again keep people from realizing that the terrific gains this year could produce, like the fabulous gains we got last year. bottom line, i just can't play the gloom game. i'll let others play it. i'm too busy trying to find the next super stocks that are out there. the next undervalued break-up plays, the next takeover opportunities, opportunities to present themselves. only those not blinded to invoke that great ballad by the smoke from a distant washington fire. let's go to jack in florida. >> caller: i read your book, i'm following a sector rotation strategy, i'm in materials and i watched the fiscal cliff being resolved a little bit, and i'm thinking what's the future on this as far as i like housing, i think it's good a place to stay for a while. what do you think? >> i agree with you. now because of my discipline, i don't come in up 2.5, 3%, i wait

for a pull-back, i'm willing to accept as i have, many times, including 1998 and again in 1989, an acceptance that i might be missing a big move because i got to wait for a pull-back, i think it's fine. it's still a sweet spot, nothing has changed, including the idea that the debt ceiling can derail it. it just got better because we have a deal. jackie, also in florida? >> caller: jim wishing you a happy and lucky, prosperous 2013. did you see the macao numbers? casino revenue numbers were up 13.5% in 2012 and up 19.6% in december. now with the strengthening of the chinese economy, the rise of the chinese middle class, and the approaching chinese new year's which happens to fall on your birthday, february 10th, i believe that whether it's an mgm, which i love, alvs or a wynn resorts, i think they got great momentum going forward and i think they should be bought right now.

what do you think? >> i'm in total agreement, i think that that group is terrific. i like mgm on a spec basis, but i did that back in 2012. and wynn? best in show. new year, new attitude. i'm letting everybody else play the gloom game. excuse me, i'm looking for the next big thing. there might be a smokescreen from washington. i can help you see through it, and i don't need rose-colored glasses to do so. coming up, fireworks? the markets fired like confetti cannons, starting off 2013 with a handsome gain on the back of a fiscal cliff deal. but can it continue? cramer takes on the technicals to find out when he goes "off the charts." and later, ready to ride? cramer is putting the pedal to the metal to find which stock could be the best performing name of 2013. get ready to load up the truck, just ahead.

plus, passport to profit? the fiscal cliff may be crumbling, but concerns over slow growth in the u.s. aren't going anywhere. looking for a place to turn? grab your luggage and hop aboard. cramer is taking a trip to find the international markets that could be traveling higher. all coming up on "mad money."

sea have to ask you to power down your little word game. i think your friends will understand. oh no, it's actually my geico app...see? ...i just uh paid my bill. did you really? from the plane? yeah, i can manage my policy, get roadside assistance, yeah, you know, pretty much access geico 24/7. sounds a little too good to be true sir. i'll believe that when pigs fly. ok, did she seriously just say that? geico. just click away with our free mobile app.

now that the big chunk of the fiscal cliff has been bridged at the last possible moment, we need to ask an important question, can this rally continue throughout 2013? i don't know how to answer. but tonight we're doing a very special wednesday edition of tuesday's off-the-charts segment with the assistance of bob

lange, a fabulous technician, to find out what he thinks is going to happen. now i asked lange what he likes for the new year, what is he thinking here, big picture. he said while the dow and the s&p 500 both looked set to reach new all-time highs, sometime this year, you heard me right. he prefers a different pair of averages, the nasdaq and the russell. he believes these are both positioned to outperform in 2013 like they did last year. here's why, take a look at the long-term monthly chart of the little drawing here, power shares qqq, the etf that reflects the nasdaq 100. even with the recent weakness in apple, which is a major component of the index, the qqq managed to close out last year above its 200-day moving average. we know that's been a positive sum. we talk about it a lot on the show. the index is now within 50 points of its all-time high. that was back in the dot-com bubble when it was at 115.

lange believes those highs could be in its sights. i didn't think we would ever see that again. he believes because right now the qqq is trading at $60.27. if it can break out above $70, then he says there's to resistance between there and 95. if the nasdaq 100 can rally 3.5 points over 70, lange thinks it could be smooth sailing to much higher prices. he sees the index ultimately making a new all-time high, over 115 bucks by late 2014 or early 2015. around two years from now, which would be a pretty fabulous move to retrace that -- our lifetime, he's got it in a couple of years. weekly chart of the qqq, he thinks there's a similarly bullish set-up. over the last several months, the nasdaq 100 has been consolidating after its big move higher at 2012. now consolidation, trading sideways, he says that's building a base it can use as a launching pad for the next big

rally. more important, take a look at the indicator at the bottom of the chart. that's the moving average, convergence/divergence, the line i talk about. everyone calls it the mac-d. we talked about it before. it's a momentum indicator that chartists use to detect shifts in the stock's trajectory, not as they, or after, but before they happen. right now lange thinks the mac-d line is signaling a big break-out for the qqq. it took off soon after. it goes there, crosses, then look at that. what great predictor. we saw it in september 2010. same thing in december of 2011. it means the nasdaq 100 could be about to make a much bigger move higher, even on top of what happened today. russell 2,000, the other big one, take a gander at the daily charts of the i-shares russell 2000 index etf. more jargon, i'm sorry for that but i've got to try to get these

things into your head. this is the russell 2000, today it took out its all time high. there's a pattern in the chart to make lange think the index could soon be making all-time new highs from here. the russell 2000 make a classic cup and handle formation. chartist jargon, that's where you have a deep bottoming pattern that looks like a cup and after a rebound, you get a cup's handle. it is so reliable. lange is not just searching for pictures inside of the chart. he likes the pattern because it is one of the most reliably bullish patterns out there. it's just a percentage it's more reliable than not. when security breaks out from a handle you get a big move higher. that's what the russell 2000 is doing right now, it's busting out of the downward handle formation, shooting higher. lange thinks this move is in its infancy.

of course there's more to it than that. take a look at the volume bars, you can see that the russell 2000 has had strong volume on the up days since mid november and much lower on the down days. this is a classic case, down much lower volume and flips, classic sign the big institutions are in there buying and the moving average convergence/divergence line is still in positive territory. i mean look, volume down, mac-d going higher. wow. this is staggering stuff. russell 2000 is a huge buy, it's a great-looking chart. check out the russell 2000 monthly chart, now we're going to look at the seasonal pattern that lange says is worth examining. lange says small caps tend to come on strong at the beginning of the year. this is a recovery thing because of tax loss selling. but that's too simple. you can see that in six of the last seven years, the january effect, that i don't know, you caught a terrific rally in the russell 2000 if you owned it in the first three months of the year.

the only exception was 2008. but that was an exceptional year all around. if this pattern holds up, this index could be about to make a big move higher. giving that the daily chart is saying the same thing, lange thinks the russell 2000 index could be the best thing around for the next three months. i'm not going to trade 2013 but i like what the set-up is here. here's the bottom line. if you believe the charts as interpreted by lang, then 2013 could be a very good year, now that we put most of the fiscal cliff behind us, he sees the dow and the s&p hitting all-time highs. he thinks the nasdaq 200 and the russell 2000. are big for the upside. after the break, i'll try to make some more money. coming up, ready to ride? cramer is putting the pedal to the metal to find which stock could just be the best performing name of 2013. get ready to load up the truck,

just ahead.

sometimes the best stock picks are ripped from the headlines, just like an episode of "law and order." a couple of day ago, there was a piece in the "washington post" saying that auto sales saved the economy in 2012.

we likely sold 14.5 million vehicles, the highest number of new vehicles sold since the financial crisis. in today's "wall street journal" we see another headline, u.s. auto sales forecast to break 15 million in 2013. when do they suggest the number of vehicles sold this year could be closer to 15.4 million. earlier today, cnbc's own phil lebeau was saying it could be 15.5 million autos this year. tomorrow we're going to find out about december auto sales numbers and i think it's going to be terrific. hurricane sandy wrecked hundreds of thousands of cars that need to be replaced. bloomberg surveyed a bunch of analysts and they're predicting a 9.8% increase for december. put it all together and the domestic auto market is clearly on fire. in fact, it's giving rise to maybe, just maybe, one of my best ideas for 2013.

we still got a tremendous amount of pent-up demand in this country. the average car on the road is ancient, about 11 years old. it's now easy to get a loan for a new car at a super low interest rate. this is a story where the easy answer is the best answer. don't try to outsmart yourself. continual theme for 2013. we're on track to sell a huge number of cars in this country, buy ford. why ford? first of all, it's the best auto company in america. it likely sold 2.2 million cars in the u.s. last year. it is the first domestic auto company to get back to prerecession levels. the ford focus was the best-selling car on earth last year, and when you include the fiesta and the f-series pickup, ford makes three of the top ten best-selling cars worldwide. nobody else has that many. ford's u.s. business, fantastic shape. ford's operating profits in north america are at the highest level since 2000 in the latest

quarter, and that is huge. plus we know that housing prices are on the rebound. when that happens, consumers feel wealthier and more likely to spend on a new car. buy buy buy. with the fiscal cliff a thing of the past, we don't need to worry about income taxes going up for 98% of americans, something that might have trimmed car sales. ford controls 16% of the u.s. auto market. two-thirds of the domestic sales come from light trucks. but the company is shifting focus to smaller cars in order to capitalize on demand for more fuel-efficient vehicles. not like gasoline went down big. hey, don't get me started about the f-series, i love them. bought a used one in 2011. f-350, it's just dynamite, it handles like a dream. don't get in front of me when i'm driving. ford has been doing great domestically for a while, now. i've become reluctant to recommend the stock because of ford's european exposure. as the losses in europe were so horrible, they virtually canceled out the terrific gains,

all that hard work in america, just destroyed by the sales in europe. the losses just horrendous. but then two months ago, ford u.s. reported a spectacular quarter and the company indicated it's aggressively cutting back on its european business. the company has announced plans to cut 6200 jobs in europe this year. we don't want anyone to lose their job, but the company has to get more profitable. moves that should generate a half a million dollars in annual savings by 2015. if these cut-backs aren't enough, ford said they're willing to go further in order to become profitable in europe by the middle of the decade. ford is more profitable than any other automaker when it comes to slash the costs in europe. gm has just discovered the worries in europe. then there is the turn in china, ford did get into china late back in 2003, six years after gm. gm has done a fabulous job there. they have 2.9% market share.

the chinese business is growing like a weed. in november, ford's chinese sales rose by a whopping 35%. a year ago, they lost money and this company they made $45 million. by 2020, ford expects that asia and africa will account for 32% of sales. total sales. up from 15% in 2010. a huge growth region and ford is making up for lost time. ford's latin american business took a hit over the last year. though still profitable. i think it could be on the verge of a comeback as latin american companies get serious about breathing new life into their economies. ford's raw costs have been a problem, but they're coming down and the company's deal with the united auto workers gives them stability at least through 2014. ford does have the best ceo in the business, allen mulally. he ran boeing aerospace, but he was what the company needed in 2006. a financial turn-around artist. mulally saved boeing and now has saved ford. thanks to mulally, ford was the only one of the big three that

didn't need to file for bankruptcy protection. they didn't take a penny of government bailout money. i think he streamlined the company a little late, but he's been improving the corporate culture and the balance sheet is so much better. in 2006, ford borrowed $23.5 billion to save the company. they had to pledge a ton of assets as collateral, including their logo. here you go, take my logo, please. they had to do that ass the end of september, they had paid its loan down to $14 million. terrific sign of how effective mulally has been in fixing the company. this is a classic better balance sheet story. the less debt ford has, the less interest the company has to pay and the higher its earnings. it is amazing to me when i worked at goldman sachs years ago, ford paper was aaa, it was like treasuries, it can happen again. i can tell you mulally is not as young as he used to be, but neither am i.

he's not going to quit his job until ford has completed its worldwide turn. the ford chart, let's just say, when i was looking over the charts this weekend, i know you thought i was on vacation, i was chart-studying, let's say it's about the best in the book. bottom line, when you see all these stories about the booming u.s. auto business, don't outsmart yourself, stick with the obvious winner. perhaps the best idea that i have. john in ohio, john. >> caller: happy boo-yah new year to you and your "mad money" staff. >> i have the best staff in the world and let me say i beat them all in fantasy football. i was going to work it in, best moment to work it in. what's up? >> caller: with car and truck sales expected to go up this year, could i have your opinion on american axle this year? >> you know i was too bullish on that. and i don't want to slight it

now, but i think it can go up. i think it can go up. it's not my favorite and that's because i actually liked ford here. let's go to bob in new jersey. >> caller: hi, jim. this is bob grunder from the storm-ravaged town of manasquan, new jersey. >> let's hope congress hears you. the guy was like listen i'm worried about waste. i'm worried about people's homes, i'm not talking about second homes, i'm talking about first homes, i think congress could address it, i sure hope so, governor christie, come on the show, repeat what you said, you're the man, go ahead. >> i have a reasonable position in gardner denver at 35 and eaton at 50. knowing that gardner denver is a takeover target and eaton at 56 seems a little rich, i would like to increase my position in one or the other. which one would you recommend and at what price for a long-term hold? >> all right. gardner denver we do, we don't know, it doesn't look like there's a deal, we don't

speculate. the fundamentals just okay there. eaton, that sandy cutler has done a remarkable job. but i'm not a buyer of stocks after an up 3% move, when they pull back it's going to be eaton is the one that i like. the best stock of 2013? it could be ford. don't outthink it. the business is starting to boom. and the winner will be the letter f. don't move. first lightning round of 2013 is coming up.

it is time, the lightning round. cramer's "mad money," as we take you calls my staff prepares the graphics, we play to the sound. and then the lightning round is over. that's on the fly. hey, before i start i want to dedicate this rally, this lightning round to everybody who stayed with the rally and listened to the show, because that was the right thing to do. are you ready? start with the lightning round. i'm going to go to dan in florida. dan? >> caller: happy new year, dr. cramer, how are you doing? >> not bad, i'm glad i got that

doctor. what's going on? >> caller: i own walgreen's stock, is it time to pull profits or is there still room for growth in 2013? >> i think it's probably got room to go higher because the drug stores are doing magnificently here. matt in michigan? >> caller: yes. from warren, michigan. i'm wondering about regeneron. >> i don't think it's done. it is one of the best performers. we had this company when the stock was at 5. their science is so much more superior to everybody else's when it comes to this macular degeneration, i think the buy buy buy. is going to 200. mike in nebraska? >> caller: happy new year, boo-yah, jim. >> same. >> caller: win -- >> no, i'm not convinced. i don't like these other companies that are, that started out as wireline companies that are trying to do more. it's not good enough. broadband, to me it's not working, you can stick with it

but i don't like it. matt in new york? >> caller: boo-yah, thanks for taking my call, jim. >> what's going on? >> caller: i'm getting into stocks. i'm wondering what your opinion is on nike. >> which one? >> nike, nke? >> i think nike is terrific. i believe in the turn in china, north america, doing terrific. splits the stock, it's a $50 stock, i think it can go to $60. glen in virginia? >> caller: jim, i'm a long-time listener and i want to thank you for helping me get back to even some time ago. >> you're terrific for saying that, thank you so much. how can i help? >> caller: i'm retired living on dividends, my favorite stock is triangle capital corporation. tcap. i would like to know what you feel it might do. >> well it's a finance company, and i got to tell you, what you want to be in is a finance company in this economy. so i'm going to say i like it.

do i know it close enough? no, i wish the ceo would come on. it would be a good story. let's go to blake in new mexico. blake? >> caller: hey jim, breaking bad boo-yah from the land of enchantment. >> walter white, jesse boo-yah, back at you, what's going on? >> caller: my stock is moly corp, they ousted their ceo, but with today's gain of 10%, china clamping down and talks of a possible takeover, is now the time to get in? >> you know what? i wouldn't even wish that on gus fring, i don't want you near that stock. sell, sell, sell. maybe tuco. not your money. let's go to james in illinois, james? >> caller: boo-yah, mr. cramer, happy new year. >> same. >> caller: my stock is dick's sporting goods, what do you think of it, 28% up the last year? >> i think it's national, lot a room for it, it's a well-run company. i'm going to mispronounce this, my apology.

i'm going to vahideh in arizona. >> caller: hi, james, i love your show, thank you for taking my call. i was wondering what you think about google's earnings, which is coming on or about january 17 or 18? >> i like google, a little bit in the penalty box versus facebook, which i think has done miraculously. the last google quarter was not good, so just to tell you i like it is just reacting to the action. i don't like to do that, i think facebook right now has more upside. wow, and that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. coming up, passport to profit? the fiscal cliff may be crumbling, but concerns over slow growth in the u.s. aren't going anywhere. looking for a place to turn? grab your luggage and hop aboard. cramer is taking a trip to find the international markets that could be traveling higher.

at the beginning of last year, everyone said you had to hide in the good old u.s. of a, because the rest of the world was falling apart. now as 2013 kicks off with another contentious battle in washington, this time over the debt ceiling, one that could be every bit as bad as the travesty we just went through two years ago, and certainly rivaling the fiscal cliff battle. i've got some new advice for where you should invest your money. at least if you're as negative about the u.s. as everything else i talked to. there's major parts of the economy that are going strong. today's rally was a magnificent demonstration of that. as we saw with the fiscal cliff nonsense, washington is gridlocked, it seems like none of the washington officials care about getting the economy strong. they would much rather fight to the death over the deficit. the measure last night passed,

but it almost didn't happen, because the house is an institution where the minority is able to hold the majority hostage. i think 2013 is a year where, as strong as the market was today, i need to you diversify some of your portfolio into international markets, if you haven't yet. especially since many of these foreign countries have either been easing or implementing stimulus measures for over a year. while the democrats and republicans only ever seem to want to fight with each other, the rest of the world has been getting its act together. they make us look like pathetic amateurs at best, if not partisans, let's say akin to the civil war period. so which regions have turned around? which regions have gotten it together and what's the best way to play them? first, here's one i haven't mentioned, 20 years? japan. after years of government gridlock where the country stumbled from one recession to the next and a dying economy

caused a flat-line economy, the one that we always laugh about, japan just had an election two weeks ago, one of the biggest landslides in their history. a 20-month low over the election, giving japanese exporters a major edge at last, as the new prime minister campaigned on a platform of boosting the economy via easing monetary policy and major government sending. japan has been struggling with deflation for over a decade. this new government has adopted the malcolm x position and will beat deflation by any means necessary. google that if you want to see some amazing video of malcolm x. given these policies, the yen is going to keep getting weaker, terrific for japan's export-oriented economy. best way to play it? >> i like the i-shares, msci japan index fund, the ewj, edward walter jim. a diversified index that owns about 100 of the biggest

companies that trade in japan. what other parts are doing better? europe. granted the european economy is still depressed. we've seen a number of data points that suggest things are stabilizing, purchasing managers index numbers for manufacturing and nonmanufacturing that have clearly stabilized and inching higher in several countries led by germany. and positive retail sales, and german business growth came at the highest level in two and a half years. greece's debt was upgraded. greece of all places. we've seen big monetary policy changes in europe. as over the last several months, the money supply in europe has doubled versus last year. plus, last month the eu agreed to a common european banking regulator, which was a very big deal. it was overshadowed by our fiscal cliff wrangling in the

u.s. if a turn is coming, at least a bottom, you need to get in before that happens. i think the bottom is for real, i think the 2012 bottom stands, if you wait until everybody thinks it's obvious you'll be out, you'll be too late. remember, the european markets kept rallying last year despite all the worries about the continent's weakness, german market, french market up 20%. uk market up 13.5%. how do you play europe? i prefer the vanguard msci euro etf, symbol vgk. that's victor george ken for all of you home gamers. i like it so much i own it for my charitable trust. you can follow it. a lot of reasoning about why stephanie link and i co-director believe in this. it pays you a solid 3.7% yield while you're waiting. next up, yeah, there's china. not done. chinese economy has been in the process of bottoming for a while now. i think the genuine turn could be at hand. we know the chinese central bank

has been aggressively providing capital injections to banks. last year they cut the reserve requirement three times, interest rates twice. i expect their policy to remain easy. capital injections turned the tide. hit record levels in september/october. something that's helped the chinese economy dramatically as we see from numerous improving macrodata points. purchasing managers numbers, industrial production, retail sales, housing numbers, you name it. china has beaten inflation, they have the flexibility to do more juice to the economy if they need to. the chinese party just got a new leadership in november. these guys are anxious to make a good impression by getting the economy up to speed. they did get it wrong. they were too tight. they've seen the error of their ways and they are now loose. when it comes to china, i like the i-shares, ftse china 25, ftse 25. that's the fxi, frank x-ray

indiana which owns a basket of 25 of the highest quality chinese companies out there. i know charitable trust holdings don't want to pick individual stocks too hard. the indian central bank cut rates by .5% in april. they still have a ton of room to go lower and there's a big upcoming monetary policy meeting on january 29th, where goldman sachs is expected to cut rates by another .5 point. india is all about growth. go for the india nifty fifty index. the indy, like indy 500. and last but not least, i like what i'm seeing in latin america. the hard core anti-capitalist chavez regime seems to be on its last legs. even mexico is a good place to invest. cartel violence seems to be dying down. a deal between the president and the cartels. if you believe in a mexican resurgence, go with the i-shares msci, mexican investable market

index. that's the eww. 12-1 ratio to the dollar. 11-1, let's talk about brazil. my favorite brazilian etf is the ewz. i am more sanguine on america's prospects than most, i can see you need to get some international diversification. given the political gridlock that strangling our economy. japan, europe, china, india, latin america, i think they could all be better places to invest for the next year than the united states, if washington doesn't get its act together. and i fear that alas -- they just might not be able to do so. "mad money" is back after the break.

you know what didn't work in 2012? some silly gobbledygook called risk on risk off. as hard as i tried to stamp out this ridiculous bit of hedge fund-ese, i wasn't able to eradicate it. it's like a roach. there's so many commentators out there and so many traders who want to succumb to this kind of nonrigorous, lazy, needlessly binary way of thinking that it's impossible to shut them all down. let 2012 be a lessen to you. the risk on risk off crowd would

have caused you to underperform if you followed them. notice i say you would have underperformed, not that they underperform. one thing is certain, none of these blowhards is ever going to let you see the returns after what i bet was a fiasco year for what i can only call an alleged strategy, not even a faulty strategy. not even a strategy. why did risk on risk off lead you astray? the s&p 500 gained 13.5 last year. but 16% of you included reinvested dividends, we know for sure those who played the on/off switch game, the binary nonsense didn't get to reinvest the dividends which are hugely important to the component of this this year's performance. some of these trading tailgunners may not have gotten anything to show for their efforts at all. even as companies continued to raise higher and higher payouts, second the shorthand risk/no

risk lets you down entirely. let's take europe. what was risky? the bonds, stocks? bonds were miraculous, stocks incredible, too. i guess if you flitted from risk on to risk off and back again, you sold low and bought high, pretty regularly, maybe daily. because the riskiest moments theoretically what you were supposed to avoid if you were playing risk off were the times when the biggest amounts of money were made. the nonstrategy might have been called buy high sell low. maybe if you do it enough times, it works? i don't think so. >> risk on risk off is a portfolio sector management tool that totally back-fired. the riskiest stocks proved to be the least risky. second, bonds as a risk off strategy seems like an oxymoron. bond funds began to take it on the chin, thanks to the fiscal

cliff spending slowdown. so what is the conclusion of all this nonsense? simple, i ran money for 30 years, i invested other people's money for 30 years and doing a charitable trust before the risk on risk off garbage came into play. i'm beginning to believe that it's simply the refuge of scoundrel who refuse to do individual stock homework or can't think of anything to ask or to say. let 2013 be the year that these people who continue with this terminology be defrocked. not that they were frocked to begin with. i'll do my best it out them as short-term mental hooligans. maybe this time with the risky s&p's sterling performance it will become clear that this nonsense is nothing but a travesty perpetrated by those offering soundbites. stick with cramer. keep up with cramer all day, follow @jimcramer at twitter.